Slow Start for Soda Industry's Push to Cut Calories

By Mike Esterl and Jennifer Maloney A pledge by the soft-drink industry to cut beverage calories in the American diet by 20% over a decade is off to a rocky start. Coca-Cola Co., PepsiCo Inc. and Dr Pepper Snapple Group Inc. set the goal in late 2014 amid rising obesity and diabetes concerns, vowing to steer more consumers to bottled water, low-calorie drinks and smaller package sizes. But U.S. beverage calories per person declined only 0.2% in 2015, a slower rate of decrease than in earlier years, according to a study published Tuesday that was funded by the American Beverage Association, an industry group. "Calorie reduction momentum has stalled," according to the report. The Food and Drug Administration recommends limiting daily intake of added sugar to about 12 teaspoons or 200 calories - less than in a 20-ounce bottle of regular Coke or Pepsi - and companies need to list on packaging how many grams of caloric sweeteners they add to foods and beverages by 2018. Daily per capita beverage calories inched down 0.4 to 198.7 in 2015, well above the industry's 2025 goal of 159.2 calories, according to the report. The 0.2% reduction represents a slowdown from the previous decade, when calories from beverages were declining roughly 1% a year on average. The report found that consumers shifting to bottled water previously drank zero-calorie soft drinks, not full-calorie sodas. "Changing behavior isn't easy," a PepsiCo spokesman said. Coca-Cola referred questions to the industry group. "We're trying to figure out what engages people," said Susan Neely, chief executive of the American Beverage Association. "How do you change their buying patterns?"' The group said it still expects to meet its calorie-reduction target by 2025 as it continues to ramp up marketing and new retail strategies. The results come at a sensitive time for the industry, which is battling calls for special taxes on sweetened drinks. Earlier this month Chicago's Cook County approved a penny-per-ounce levy, joining Philadelphia, San Francisco and four smaller U.S. cities that have passed similar measures since 2014. On Tuesday, both PepsiCo and Dr Pepper struck deals to acquire upstarts that promote drinks that are marketed as healthier and more natural. Dr Pepper agreed to pay $1.7 billion for Bai Brands, which makes low-calorie coffee-fruit drinks. PepsiCo is paying a bit more than $200 million for kombucha maker KeVita, according to people familiar with the matter. Americans are drinking more water - so much so that bottled water consumption could surpass soda for the first time this year, according to industry watchers. But while U.S. water consumption surged 7.1% in 2015, that didn't result in reductions in caloric beverages. Consumption of full-calorie sports drinks, energy drinks and ready-to-drink tea and coffee each increased 7% or more in 2015, according to Tuesday's report. Consumption of full-calorie sodas fell 0.9% last year, while low- and no-calorie soda tumbled 5.9% as more consumers avoid artificial, zero-calorie sweeteners such as aspartame. Companies continue to experiment with in-store marketing techniques in places like Bedford Stuyvesant, a low-income neighborhood in Brooklyn, N.Y., where industry representatives say consumers weigh price more than calories. During a tour of an Ideal Food Basket grocery store organized by the ABA, a display shelf on the end of an aisle featured zero-calorie sodas at eye level, including 2-liter bottles of Sprite Zero and Diet Dr Pepper. A stand-alone holiday display featured eight-packs of 7.5-ounce "mini cans" of Coke, Diet Coke and Coke Zero with coupons offering a dollar off the purchase of two packs. At Utica Express Deli, a bodega with a torn awning, signs inside and outside the store said: "Balance What You Eat, Drink & Do." Inside, one cooler door was decked with orange-colored 99-cent stickers. At eye level were 16.9-ounce bottles of Pepsi, Schweppes Ginger Ale and Mountain Dew - smaller-portion alternatives to the more popular 20-ounce versions. Koast Lewis, a 28-year-old neighborhood resident, pulled out a 16.9-ounce ginger ale and bought it. He said he hadn't noticed the signs encouraging moderation.